Monday, 16 March 2015 20:12
LONDON: Gold fell on Monday, trading just above its lowest level in more than three months, due to stronger European shares and expectations that this week’s Federal Reserve meeting could hint at the timing of any hike in U.S. interest rates.
Spot gold was down 0.5 percent at $ 1,152.66 an ounce by 1427 GMT. The metal had fallen for nine consecutive sessions up to Thursday, its longest losing streak since 1973. It hit its lowest since Dec. 1 on Wednesday at $ 1,147.10, after strong U.S. jobs data stoked speculation the Fed would raise rates in June.
U.S. gold futures for April delivery were unchanged at $ 1,152.40 an ounce.
The metal shrugged off weakness in the dollar, which slid 0.8 percent against a basket of leading currencies.
The U.S. currency, however, which has risen 10 percent so far this year, was still trading close to its highest since 2003.
“Speculative investors are quite clearly out of love with gold at the present time and as long as we have this meteoric rise in the U.S. dollar going on, it’s difficult to see a change in gold’s fortunes,” bullion broker Sharps Pixley CEO Ross Norman said.
Investors were looking at the Fed’s two-day policy meet that begins on Tuesday for clues on how soon it could raise interest rates. Higher rates could dent demand for gold, which does not pay any interest.
“The only thing that could cause shorts to rethink their positions at the moment would be if the Fed didn’t raise rates in June,” Deutsche Boerse’s MNI senior analyst Tony Walters said. “But if the Fed removes ‘patient’ from its minutes then I’d expect more selling.”
Investor sentiment towards gold has been bearish. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.28 tonnes to 750.67 tonnes on Friday.
Hedge funds and money managers reduced their bullish stance in Comex gold for the sixth straight week in the week ended March 10, U.S. Commodity Futures Trading Commission data showed on Friday.
Lower gold prices attracted some bargain hunters in Asian physical markets, but not in sufficient numbers to boost prices, according to traders.
In the second-biggest consumer China, premiums on the Shanghai Gold Exchange increased slightly to $ 5-$ 6 an ounce above the global London benchmark.
Silver was down 0.5 percent at $ 15.56 an ounce, while palladium fell 0.5 percent to $ 785.90 an ounce.
Platinum was flat at $ 1,112.95 an ounce, having slipped to its lowest since 2009 at $ 1,108.50 on Thursday.
Copyright Reuters, 2015
